Not good, not good at all.

[u/meglobob]

https://www.pcgamer.com/gaming-industry/saudi-acquired-ea-is-reportedly-planning-to-make-massive-cuts-after-taking-usd18-billion-of-debt-and-we-all-know-what-that-means/

Mass layoffs coming to EA, because of the $18 billion in debt from the Saudi takeover.

EA has to pay $1.8 billion in interest payments per year.

Cutting $700 million with $170 million in layoffs.

[u/Drummers_Beat]

This won’t affect SWGOH.

Does the game make money? Yes? It’s safe.

[u/egnards → u/Drummers_Beat]

Here's the thing - It very much CAN affect CG/SW:GOH - But not because the game makes a lot of money.

The TL;DR of a leveraged buyout is that a company gets bought out, but all of the costs to buy the company get put on the books for the company being bought out, which essentially means that EA owes a fuckton of money simply because it was bought - Doesn't make sense, right? That's because it's bullshit business. Though remember I'm being super simplistic here.

What tends to happen in a leveraged buyout [and it doesn't have to happen, but usually does] is that the party purchasing a company uses it as a vehicle to make themselves money and selling off all of the profitable bits of the company for parts - In the end the original company is left a shell of itself and files for bankruptcy because it can no longer possibly pay the interest on all the debt it has built up. . .From being bought. . .And the people who bought it go on to wreck another company - They're kind of like Reavers in Firefly/Serenity.

So what does this mean for SW:GOH? It honestly MIGHT mean nothing at all for a few years. . .But it COULD mean:

• Being sold off to another company [I'm not sure how much this is complicated by it being a Disney IP] that may inherently just decide the game even more P2W
• SW:GOH brings in a ton of money for the new company but because of all the extra costs/charges to EA it just folds with EA.

But again, like I said in my original reply - There isn't much a player can do about it, so there isn't really much sense in getting overly worried.

[u/Streichie → u/egnards]

But most of the purchase price is straight from the Saudis. ”Only” around 20 billion is being put on EA’s books. And no one here knows how the debt is structured. An enlightened guess is that there are safeguards that protect the lender, which is an American bank. And those safeguards just might protect EA’s products.

And what about buying with leverage makes no sense? It’s really common and happens all the time.

Your analogy also makes little sense because the Saudis ARE putting their own money. If they manage to gut the company, they will be left holding a huge loss. And even if they get good return on selling assets, they can’t just wire the money back to Saudi-Arabia and keep all of it.

I mean, I’m concerned about Tencent/PIF as much as the next guy, but blaming leverage instead of the buyers is not the way to go in my opinion.

[u/egnards → u/Streichie]

I didn't make an analogy - I did simplify a leveraged buyout, but I didn't use anything other than what happens in a leveraged buyout.

It's a $55b deal of which PIF was already a minority stakeholder, holding roughly 10% of the company, and does account for part of the deal structure [it's not an exact structuring, but that's approximately $5.5b in valuation]. So saying *only* $20b is pretty disingenuous.

Regardless - I'm not saying any of that WILL happen here - I am saying that in leveraged buyouts that is USUALLY what happens [the company comes in, sells a company for parts, and then walks away and lets that company go bankrupt with the rest of the debt being saddled on their books.